The end of silver’s bear market and one last dip before Santa

The momentum that led to the boomerang session in stocks yesterday has fizzled as we move into hump day. Gold bugs aren’t complaining. Well, they probably are, just not about the direction of gold prices. Silver bulls also have reason to drink in the holiday spirit (more on that below).

But investors looking for that lovely Santa bump in equities are starting to get a little stressed out. As they should. Greece is, again, freaking out the eurozone, the oil meltdown is raising questions faster than they can be answered, and higher rates could be right around the corner.

All this while the global pretenders are about to be exposed.

“We are reaching the final act of central bank largess that has never before been seen,” said Peter Boockvar, Lindsey Group’s chief market analyst. “Central banks have got nothing left. We’ll now see who can stand on their own and who can’t.”

Yes, stress is justified.

In terms of trends, though, our chart of the day should help alleviate some of that angst by showing the seasonal push is right on track. The recent decline just might be 2014’s last dip-buying opportunity.

The quote of the day

“The largest IPO in the history of the stock market is a Chinese company, and it’s a communist country. They shouldn’t be allowed based on what I know today, but if they’re in, it’s just one more stock to trade or invest in depending on your perspective.” — Mark Cuban, talking Alibaba
BABA, -2.01%
a stock he owns, in an interview on CNBC.

The economy

Not much in the way of U.S. data on tap until things heat up on Thursday. Still, at 10 a.m. Eastern, we’ll get the underrated Quarterly Services Survey, which tracks revenue at service-providing firms and has led to notable revisions for estimates of consumer spending on health care and other services. Read: Services sector gauge finally gets its due.

Earnings

Yum Brands
YUM, -0.91%
could lead a trio of earnings losers south this morning, including Krispy Kreme Doughnuts
US:KKD
and Broadcom
US:BRCM
following a batch of disappointing results that were posted late Tuesday afternoon. On today’s docket, Costco Wholesale
COST, +0.04%
has already reported some upbeat results that could lift shares. Toll Brothers
TOL, +1.03%
has also reported and Hovnanian Enterprises
HOV, +5.66%
is still to come.

The buzz

GoPro
GPRO, -2.31%
shares are down more than 1% in premarket trading. In the early days of its public life, that would have stood out as a notable dip. But not lately. Despite mostly good news, it’s been an ugly ride, with the stock down 27.8% since reaching a record on Oct. 7. Read: Four possible explanations for the recent selloff.

Goodrich Petroleum
GDP, +0.36%
shares have dropped 3.4% in premarket trading, after it said it’s exploring a sale of a shale asset.

There may have been a leak in Nike’s
NKE, +0.01%
secretive Innovation Kitchen. The shoemaker is taking aim at three former designer alleged to have used trade secrets to sell themselves to heated rival Adidas, according to ESPN. The lawsuit is going after more than $10 million in damages.

Life without longtime boss Mike Jeffries begins today for Abercrombie & Fitch
ANF, -0.77%
and considering the reception his announced departure drew on Tuesday, look for better times ahead. The stock is up just a tad premarket after surging 8% in yesterday’s session. Sad that he won’t be around to say things like this anymore: “Abercrombie is only interested in people with washboard stomachs who look like they’re about to jump on a surfboard.” Read more quotes like this.

The chart of the day

The last couple of days sure didn’t feel like a market with a seasonal tailwind, but as this chart from Chad Gassaway shows, the pattern fits the historical blueprint. Meaning, don’t give up on Santa. “There continues to be a bearish seasonal bias for the next four sessions,” he said. “However, this is where the weakness ends. While the market can continue to drop over the rest of the week, we are using this as an opportunity to cover shorts and enter trades from the long side.” This pullback is just giving traders a tasty entry point ahead of the year-end push, he added.

Sentiment Trader

The call of the day

In April 2011, Peter Brandt called the top in silver
US:SIH5
back when it was trading above $40 an ounce. He said it looked like the “classic blowoff top” and that, within five years, it would be back in the low teens. It’s only been three and change, and prices are definitely cooperating. But now, after more than three years of “rubbing the noses of silver bulls into one of the commodity market’s most famous bear trends,” Brandt is having a change of heart. “I believe that silver bulls will now get the last laugh,” he said. “By my count, there are at least six technical chart reasons pointing to why the silver bear is dead.” Check out the visuals he uses to bolster his case.

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